Savvy is reimagining employer health insurance

Savvy Technologies, the San Francisco-based startup that’s backed by Y Combinator, is taking a different approach to employer-sponsored health insurance.

Led by Suril Kantaria and Kevin Cox, Savvy is taking advantage of a new employer-sponsored health insurance model, which became available as of January 1, 2020. The new option, ICHRA (Individual Coverage Health Reimbursement Arrangement), allows employers to set a budget for their employees to buy health insurance. Once a budget is set, employees have the freedom to pick any plan they need from the individual market with the same tax benefits as a traditional company group health plan.

“Employer-selected health insurance is an anomaly, and it just doesn’t make sense. We don’t ask our employers to buy our car insurance, homeowners insurance, or the stocks in our personal portfolios – so why should they control our personal health?,” Kevin and Suril wrote in a post titled Why we are building Savvy. “The reason is largely a historical fluke. Employers offer healthcare because of a tax exemption introduced by the US government after World War 2, and we’ve been stuck with this “original sin” for 70+ years.”

With the new regulations allowing companies to offer tax-advantaged health budgets to employees instead of pre-selecting health benefits packages, Savvy is building “the first benefits platform to facilitate this new way of offering health benefits.”

The platform allows employers to set up different budget amounts based on full-time, part-time, employee location, and more. Savvy then takes care of onboarding employees and helping them pick a health plan from a range of insurers including UHC, Humana, Oscar, and others.